Insurers Eye Billions in Private Firms

Private sector insurers have petitioned the Insurance Regulatory and Development Authority of India (Irdai) to modify draft investment regulations concerning unlisted companies. The industry advocates for linking exposure limits to total shareholders' funds rather than the surplus remaining after solvency requirements are met.

This proposed adjustment could dramatically increase insurers' capacity to invest in privately held businesses. Industry estimates suggest the sector's investment in private companies could rise to nearly ₹10,000 crore from the current less than ₹1,500 crore. Insurers argue this flexibility is crucial for managing long-term liabilities and for providing patient capital to sectors like infrastructure and manufacturing.

The revised framework is part of broader efforts by Irdai to expand permissible investments and enhance portfolio management. Alongside increased limits for private companies, Irdai is considering allowing insurers to conduct repo transactions and participate in government securities lending, offering greater flexibility and potential for additional returns.